In planning for energy generation adequacy, determining the optimum level of energy reserves is difficult. If a utility maintains too low of a reserve margin, there is a high likelihood of being unable to serve the demands of all firm-load customers. If a utility maintains too high of a reserve margin, much money is wasted in building and maintaining capacity that is rarely used. A new digital simulation model is needed that can quantify the risk of occurrence of a wide-range of possible scenarios in terms of expected unserved energy (EUE) and expensive market purchases required to avoid shedding firm load customers. A wider range of components that contribute to unreliability need to be modeled than would be in an application that was designed for minimizing production cost.
Almost all reliability issues are expected to occur in the upper 10% of all possible weather, load forecast error, and hydro availability scenarios. In order to achieve statistical significance, a large number of cases need to be run in a simulation that realistically models energy generation and dispatch.